Critical Contrast: Severn Trent (STRNY) versus Its Rivals

Severn Trent (OTCMKTS:STRNY) is one of 38 public companies in the “Water Utilities” industry, but how does it compare to its competitors? We will compare Severn Trent to similar companies based on the strength of its institutional ownership, earnings, dividends, risk, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings for Severn Trent and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Severn Trent	0	6	1	0	2.14
Severn Trent Competitors	402	1210	1004	29	2.25

As a group, “Water Utilities” companies have a potential upside of 92.70%. Given Severn Trent’s competitors stronger consensus rating and higher possible upside, analysts plainly believe Severn Trent has less favorable growth aspects than its competitors.

Dividends

Severn Trent pays an annual dividend of $1.92 per share and has a dividend yield of 4.6%. Severn Trent pays out 234.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Water Utilities” companies pay a dividend yield of 4.2% and pay out 84.2% of their earnings in the form of a dividend.

Insider and Institutional Ownership

0.1% of Severn Trent shares are held by institutional investors. Comparatively, 57.7% of shares of all “Water Utilities” companies are held by institutional investors. 7.7% of shares of all “Water Utilities” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Severn Trent and its competitors top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Severn Trent	N/A	N/A	51.36
Severn Trent Competitors	$4.34 billion	$270.20 million	15.00

Severn Trent’s competitors have higher revenue and earnings than Severn Trent. Severn Trent is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Severn Trent and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Severn Trent	N/A	N/A	N/A
Severn Trent Competitors	4.67%	3.13%	1.99%

Summary

Severn Trent competitors beat Severn Trent on 11 of the 13 factors compared.

About Severn Trent

Severn Trent PLC operates as a water and sewerage company in England and Wales. It operates through two segments: Regulated Water and Waste Water, and Business Services. The Regulated Water and Waste Water segment offers water and waste water services to approximately 4.8 million households and businesses. The Business Services segment generates renewable energy from anaerobic digestion, hydropower, wind turbines, and solar panels; property development; and offers affinity products and search services. It also provides services to municipal and industrial clients, including the Ministry of Defence and the Coal Authority for design, build, and operation of water and wastewater treatment facilities and networks. Severn Trent PLC was founded in 1974 and is headquartered in Coventry, the United Kingdom.